IFPI Press Release, April 8, 1999
Finland Urged to Pioneer Legal EU Internet Music Market and Lead Fight Against Piracy
Music Industry Heads Meet Ministers in Helsinki on EU Presidency Priorites
Helsinki, June 18, 1999
Finnish consumers will soon have legal access via the Internet to hundreds of thousands of music recordings, provided a crucial draft Copyright Directive under discussion in Brussels gives the necessary protection to artists, song writers and record companies. This was the message conveyed by international music industry heads to the Finnish government on the eve of the country's six-month tenure of the Presidency of the European Union.
In meetings with Suvi Linden, Minister of Cultural Affairs, and Kimmo Sasi, Minister of Foreign Trade, a senior European record industry delegation said Finland's top-ranking levels of Internet penetration (usage estimated at about 25%) meant the country's 125 million Euros music market stands to reap huge benefits from the music industry's transition into an on-line business.
But these benefits depend on new EU legislation that will adequately protect the rights of music creators and distributors, which stymie the huge threat of Internet piracy.
The music industry delegation also urged Helsinki to focus EU policies on the alarming rise in illegal pirate CD traffic, where Finland is on the "front" line of a massive pirate CD industry in the CIS and Baltic States. One third of all recordings in Finland are now estimated to be imported copies from Estonia. There has been a direct impact on the Finnish music market in 1999: unit sales fell 9% in the first five months, reversing the healthy 6% rise in 1998. Further afield, estimates just released by IFPI show the illegal traffic of pirate CDs rose 20% to 400 million units in 1998. (see Memorandum: Eastern Europe - Legislation, Piracy and Enforcement - EU Accession available in annex).
In particular Finland is called on to strengthen the current draft of the Copyright Directive. Present provisions on "temporary copying" do not give artists and record companies adequate protection from Internet piracy; they also wrongly exempt "intermediaries" (e.g. telecom companies and on-line service providers) from liability for copyright infringement. The present draft also restricts the ability of artists and producers to use technical measures (such as encryption and watermarking) to control the use of their works; and, in its existing form, the Directive inadequately protects against the "hacking" of technical measures. (see memorandum on the Copyright Directive, available in annex).
The delegation of top executives of independent and major record companies including BMG, EMI, Universal Music International and Warner Music, was organized by IFPI, the trade organization for the international recording industry. Europe has a thriving 11.6 billion Euros music market, employing 600,000 people and providing about one third of all repertoire sales worldwide.
Rupert Perry, President of EMI Europe and Chairman of IFPI European Board, said: "The music industry is moving rapidly into an on-line age that will bring music to consumers in a myriad of new and better ways. But Europe urgently needs strong copyright rules to make this new environment a reality. Finland, as world-leader in technology and the use of the Internet, is ideally placed to lead the cause in Europe for a strong Copyright Directive".
Jay Berman, Chairman of IFPI said: "The last few months have seen a raft of investments by record companies in on-line commerce. But in only a few territories of the world, notably the US, is there legislative security for the business to go ahead. Europe now needs urgently to move to provide that security"
Piracy on the Internet is still in its infancy but spreading fast. Already there are estimated to be half a million illegally-posted music files on the Internet. IFPI and its United States affiliate the RIAA have succeeded in having 16,000 taken down. In recent months, 400 illegal music websites were identified in Finland, and the number has doubled in the last six months. (see Internet Piracy Fact Sheet in annex)
The draft Copyright Directive will be one of the major pieces of EU internal market legislation to be handled by the Finnish Presidency starting on 1 July. The Directive is aimed at implementing two landmark international (WIPO) Treaties concluded in 1996 by transposing existing copyright rules to the digital environment.
Finland takes over the Presidency at a crucial time in the Directive's evolution. The original draft proposed by the Commission in 1997 fell far short of the rights and the protection from piracy required by the music sector and a wide range of copyright-based industries.
In February 1999 the European Parliament voted to substantially strengthen the proposal. This was partly in response to the Petition "Artists Unite for Copyright", signed by over 700 artists and musicians in Europe, including 78 from Finland. The Commission, however, in May rejected many of the most important amendments voted by the Parliament. Under the Finnish Presidency, the Directive returns to the EU Council of Ministers, representing all 15 EU governments.
Briefing documents available to media:
Memorandum: Music Industry Priorities for the Finnish EU Presidency (excerpts)
Internet Piracy Factsheet
IFPI Piracy Report 1998, released 10 June 1999
For further information contact:
Adrian Strain, IFPI: 44 171 878 7939
Arto Alaspaa, IFPI Finland: Tel. 358 9 6803 4050